Al-Saeed: FDI to Reach $5.5 Billion in 2020/21

Hala Al-Saeed, Minister of Planning and Economic Development, confirmed on Saturday that most international reports praise the Egyptian economy and the measures taken by the state to confront the coronavirus crisis, referring to the expectations of international institutions for an improvement in Egypt's economic indicators in the coming periods.

Al-Saeed pointed out that the International Monetary Fund (IMF) expects an improvement in Egypt's foreign reserves, adding that the report expects reserves to reach $ 40.1 billion in 2020/21, and $ 51 billion in 2024/25.

IMF foresees Exports of goods and services  to reach $ 34.7 billion during the year 2020/21, and $ 76.2 billion during the year 2024/25.

The fund also expects net foreign direct investment (FDI) to reach $5.5 billion during the year 2020/21, and $17.1 billion during 2024/25.

The IMF also praised the developments of the Central Bank of Egypt in various sectors, according to the report.

The minister pointed out that Capital Economics predicts a relieve to the Egyptian pound, after the country manages to overcome pressure on the balance of payments as tourism heads towards recovery.

Fitch Ratings also expects Egypt to succeed in increasing foreign exchange reserves in the coming years, enough to cover imports for a period of at least 6 months until 2024. It also expected the total value of exports to reach $ 47.7 billion in 2020, reaching $ 55.3 billion in 2024.

Al-Saeed pointed out that the Egyptian pound is one of the best performing emerging market currencies, explaining that over the past years, the economic and structural reforms implemented have given the pound a degree of flexibility and resistance in order to be able to face shocks, adapt to crises and recover from Its negative effects.

Moreover, Capital Economics stated that the pound has witnessed a 2% rise against the dollar since July, with the Central Bank of Egypt keeping interest rates unchanged to encourage the flow of capital.

in addition, the Economist expects an improvement in the performance of the pound against the dollar in the coming years, compared to levels ahead the corona crisis in 2019, in which the dollar exchange rate reached EGP 16.82. The performance of the pound is expected to improve by 4.5%.  to record EGP 16.06 against the dollar in 2020, EGP 16.10 in 2021, EGP 15.97 in 2022, EGP 15.85 in 2023, and EGP 15.74 in 2024.

According to the Ministry of Planning report, Fitch Agency also indicated the Egyptian pound was among the best performing emerging market currencies until August of 2020, expecting it to remain relatively stable until the end of 2020.

The report pointed out, EFG Hermes apprehends that Egypt will achieve an economic growth rate of 3% during the current fiscal year 2020/21, and based on the positive growth rates achieved by the Egyptian government during the crisis, noting that international rating agencies kept the country's credit rating at stable during the pandemic.

Al-Monitor believes that emerging technology companies in Egypt offer hope to the economy in the new post-corona world, noting that while the Egyptian economy is facing pressures from several factors, such as preventive measures from the virus, and the sudden stop in tourism, yet, one of the bright spots in the economy is the technological boom that has continued.

The D.C. based news platform explained that e-commerce have risen significantly in Egypt during this period as some companies witnessed an increase in online sales, including fashion, foodstuffs, hygiene products, gifts and other consumer products.

Finally, the World Tourism Organization (UNWTO) also expressed its readiness to support Egypt to return the rates of inbound tourism to its previous rates before before crisis, as the organization indicated the seriousness of precautionary measures applied in Egypt's hotels, noting the the Egyptian government deals with the pandemic with full seriousness and commitment to take all precautionary measures to preserve tourists' health.